Question 1

The program expense ratio is calculated as follows:

Accepted Answer

A)  Program service expenses / Total expenses 
B)  Program service expenses + supporting service expenses / Total expenses 
C)  Total expenses / Program service expenses 
D)  Total expenses / Program service expenses + supporting service expenses 
A)  Program service expenses / Total expenses 
B)  Program service expenses + supporting service expenses / Total expenses 
C)  Total expenses / Program service expenses 
D)  Total expenses / Program service expenses + supporting service expenses

Question 2

The term "opinion unit" refers to which of the following:

Accepted Answer

A)  A state or local government together with its component units 
B)  A level of reporting of a government that requires a separate materiality level 
C)  A division of a CPA firm 
D)  One of the four statements required in the second paragraph of an unqualified audit opinion 
A)  A state or local government together with its component units 
B)  A level of reporting of a government that requires a separate materiality level 
C)  A division of a CPA firm 
D)  One of the four statements required in the second paragraph of an unqualified audit opinion

Question 3

If a government failed to report infrastructure assets, the auditor would be unable to express an unqualified opinion on the fund level financial statements.

Accepted Answer

A) True 
 B)False

Question 4

While the principal users of corporate audit reports are investors and creditors, the main user of Single Audit reports is the federal government.

Accepted Answer

A) True 
 B)False

Question 5

What is an "opinion unit" and what are the five opinion units for state and local governments?

Accepted Answer

In any audit engagement, the auditor mus

Question 6

Which of the following may be deducted in computing income from unrelated business activities?

Accepted Answer

A)  Ordinary and necessary business expenses 
B)  $1,000 exemption 
C)  Charitable contributions 
D)  All of the above 
A)  Ordinary and necessary business expenses 
B)  $1,000 exemption 
C)  Charitable contributions 
D)  All of the above

Question 7

Tax exempt entities do not have retained earnings in the equity section of their financial statements.

Accepted Answer

A) True 
 B)False

Question 8

Government financial audits are subject to both GAAS and GAGAS.

Accepted Answer

A) True 
 B)False

Question 9

The single audit act provides assurance to the federal government that federal funds are protected through a system of internal controls and sound financial management practices

Accepted Answer

A) True 
 B)False

Question 10

What factors would cause income that would otherwise qualify as unrelated business income to not be taxed?

Accepted Answer

The existence of one or more of the foll

Question 11

In a disclaimer of opinion, the auditor states that no opinion is being expressed.

Accepted Answer

A) True 
 B)False

Question 12

While the Sarbanes-Oxley Act applies only to corporations filing with the Securities and Exchange Commission, several provisions of the Act already existed in governmental auditing standards and others are being voluntarily adopted by not-for-profit organizations.

Accepted Answer

A) True 
 B)False

Question 13

Governmental Audit Reports are due nine months after the end of the fiscal year.

Accepted Answer

A) True 
 B)False

Question 14

The IRS believes that three of the areas of concern with respect to tax-exempt organizations are:

Accepted Answer

A)  Cost allocations 
B)  Excess executive compensation 
C)  Organizations operating out of their tax-exempt purpose 
D)  All the above 
A)  Cost allocations 
B)  Excess executive compensation 
C)  Organizations operating out of their tax-exempt purpose 
D)  All the above

Question 15

Supporting expenses are included in the denominator of the program expense ratio

Accepted Answer

A) True 
 B)False

Question 16

Bonds which carry the full faith and credit of a government are called general obligation bonds.

Accepted Answer

A) True 
 B)False

Question 17

Governmental Auditing Standards identifies four categories of professional engagements: financial audits, performance audits, attestation engagements and non-audit services.

Accepted Answer

A) True 
 B)False

Question 18

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from endorsing political candidates or attempting to influence legislation.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

Accepted Answer

A)  Financial Audit 
B)  Attestation Engagement 
C)  Performance Audit 
D)  Nonaudit services 
A)  Financial Audit 
B)  Attestation Engagement 
C)  Performance Audit 
D)  Nonaudit services

Question 20

Service Efforts and Accomplishments reporting may be important because:

Accepted Answer

A)  SEA reporting provides more complete information about a government entity's performance than can be provided by the operating statement, balance sheet and budgetary comparison statement which provide only incomplete information about a government's performance 
B)  The GASB requires supplemental reporting of service efforts and accomplishments 
C)  Enterprise fund statements do not do a good job of measuring efficiency or effectiveness 
D)  All of the above 
A)  SEA reporting provides more complete information about a government entity's performance than can be provided by the operating statement, balance sheet and budgetary comparison statement which provide only incomplete information about a government's performance 
B)  The GASB requires supplemental reporting of service efforts and accomplishments 
C)  Enterprise fund statements do not do a good job of measuring efficiency or effectiveness 
D)  All of the above

The program expense ratio is calculated as follows:

The term "opinion unit" refers to which of the following:

If a government failed to report infrastructure assets, the auditor would be unable to express an unqualified opinion on the fund level financial statements.

While the principal users of corporate audit reports are investors and creditors, the main user of Single Audit reports is the federal government.

What is an "opinion unit" and what are the five opinion units for state and local governments?

Which of the following may be deducted in computing income from unrelated business activities?

Tax exempt entities do not have retained earnings in the equity section of their financial statements.

Government financial audits are subject to both GAAS and GAGAS.

The single audit act provides assurance to the federal government that federal funds are protected through a system of internal controls and sound financial management practices

What factors would cause income that would otherwise qualify as unrelated business income to not be taxed?

In a disclaimer of opinion, the auditor states that no opinion is being expressed.

While the Sarbanes-Oxley Act applies only to corporations filing with the Securities and Exchange Commission, several provisions of the Act already existed in governmental auditing standards and others are being voluntarily adopted by not-for-profit organizations.

Governmental Audit Reports are due nine months after the end of the fiscal year.

The IRS believes that three of the areas of concern with respect to tax-exempt organizations are:

Supporting expenses are included in the denominator of the program expense ratio

Bonds which carry the full faith and credit of a government are called general obligation bonds.

Governmental Auditing Standards identifies four categories of professional engagements: financial audits, performance audits, attestation engagements and non-audit services.

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from endorsing political candidates or attempting to influence legislation.

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

Service Efforts and Accomplishments reporting may be important because:

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Trust Funds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Filters

Exam 13: Auditing, Tax-Exempt Organizations, and Evaluating Performance

The program expense ratio is calculated as follows:

The term "opinion unit" refers to which of the following:

If a government failed to report infrastructure assets, the auditor would be unable to express an unqualified opinion on the fund level financial statements.

While the principal users of corporate audit reports are investors and creditors, the main user of Single Audit reports is the federal government.

What is an "opinion unit" and what are the five opinion units for state and local governments?

Which of the following may be deducted in computing income from unrelated business activities?

Tax exempt entities do not have retained earnings in the equity section of their financial statements.

Government financial audits are subject to both GAAS and GAGAS.

The single audit act provides assurance to the federal government that federal funds are protected through a system of internal controls and sound financial management practices

What factors would cause income that would otherwise qualify as unrelated business income to not be taxed?

In a disclaimer of opinion, the auditor states that no opinion is being expressed.

While the Sarbanes-Oxley Act applies only to corporations filing with the Securities and Exchange Commission, several provisions of the Act already existed in governmental auditing standards and others are being voluntarily adopted by not-for-profit organizations.

Governmental Audit Reports are due nine months after the end of the fiscal year.

The IRS believes that three of the areas of concern with respect to tax-exempt organizations are:

Supporting expenses are included in the denominator of the program expense ratio

Bonds which carry the full faith and credit of a government are called general obligation bonds.

Governmental Auditing Standards identifies four categories of professional engagements: financial audits, performance audits, attestation engagements and non-audit services.

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from endorsing political candidates or attempting to influence legislation.

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

Service Efforts and Accomplishments reporting may be important because:

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Trust Funds

Government-Wide Statements, Capital Assets, Long-Term Debt

Accounting for Special-Purpose Entities, Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Filters